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Statehouse may seek new road to $1B plan

By Andy Metzger, State House News Service

Updated:
02/26/2013 07:39:29 AM EST

BOSTON -- While Gov. Deval Patrick has proposed bankrolling his $1 billion transportation plan with an income-tax hike that is central to his $34.8 billion budget plan, the House might take a different approach and seek to raise funds from users of the transportation system.

"The financing method for transportation works best when there's a connection or a nexus to the users or those who benefit from the transportation system," House Chairman of the Joint Committee on Transportation William Straus told the News Service.

The Mattapoisett Democrat said that House and Senate leadership might decide to carve the transportation funding out of Patrick's budget and consider a new transportation-financing bill, perhaps in tandem with the state budget.

Straus said that funding transportation with user fees would be a better guarantee that the funding stream would remain in place than an income tax -- which combined with the closure of tax incentives provides the bulk of the new revenues Patrick sees as critical to education and transportation investments.

"You can't do it one annual budget at a time," Straus said. He said, "My preference is that we finance it in a way that essentially locks the money up for transportation."

While Patrick's budget calls for regular gas tax increases by tying the tax to inflation, the governor in the latest Beacon Hill debate over transportation funding resisted using an increase in the tax as the engine for funding transportation improvements.

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"It would take a tripling of the gas tax to fund this plan. It would put us way out of sync with our competitors in the region and nationally, actually, so that is not at the top of my list," Patrick said when unveiling "The Way Forward," a report on the $1 billion annual funding needs for transportation. The memory of his own failed attempt to raise the gas tax in 2009 is still fresh in the governor's mind, as well.

"We've tried the gas tax before and I had my head handed to me," Patrick said last November, months before he submitted his own plan. In 2009, the Legislature opted instead to increase the sales tax from 5 percent to 6.25 percent, in order to shore up recession-thinned state revenues. Patrick's budget calls for a rollback of the sales tax to 4.5 percent.

The gas tax was last increased in 1991, and still stands at 21 cents per gallon, which is significantly less than the gas tax in all of New England and New York, except for in New Hampshire, where it is 18 cents. Massachusetts also has a 2.5 cents per gallon underground storage-tank fee.

To raise the $1 billion deemed necessary to improve and expand transportation in the state, the gas tax would have to rise to 51 cents per gallon, according to "The Way Forward," which would make it the highest gas tax in the region, though just barely edging out New York's 50.6-cent-per-gallon rate.

By drawing on income taxes, new corporate taxes and a closure of tax breaks, Patrick's budget would raise about $1.9 billion in revenue, which the administration plans to devote in part toward education as well as transportation.

Legislators have approached Patrick's plan with caution and described mostly negative reactions from constituents, though House Speaker Robert DeLeo and Senate President Therese Murray have said they remain open to the idea.

Straus is more bullish than Patrick on the benefits of the gas tax as a means for raising transportation revenue. The motor fuel tax is paid by those who use the state's roads and highways, and consumers who opt for more environmentally friendly vehicles pay less, Straus said. He said the gas tax would have to remain "a central part of our transportation system."

Straus outlined some of his ideas on transportation financing in response to a News Service story that revealed the income tax was not among the "menu" of potential transportation funding sources in a draft version of "The Way Forward" that Patrick sent back for more work and refining.

A gas tax, and other taxes and fees paid by users of transportation -- such as MBTA fares and Registry of Motor Vehicle fees -- are insulated from the desires of future legislators and governors to use those revenues for non-transportation areas of government, Straus said, in a way that the income tax is not.

"The Way Forward" lays out the transportation funding needs for the next 10 years. Straus said that income-tax revenues would be more easily shifted away from transportation needs, which could spell uncertainty for transportation funding over the decade.

Straus said he agrees with "the administration's number of current 'underfunding' of transportation each year at $1 billion" and pointed out that includes the roughly $250 million it would take to transfer highway workers from the capital budget to the operating budget.

Straus said that the administration's goal of fully funding and expanding the transportation system would require another, dedicated route, and said it would be up to legislative leadership whether to separate out the transportation funding from the governor's budget.

"If the goal is more than one year, then as a logical conclusion you have to be talking about another piece of legislation," Straus said.

A spokesman for DeLeo said there has not yet been a decision about whether to split the transportation financing from the overall budget.

Transportation Secretary Richard Davey has said that he is aiming to submit, by Friday, a $3 billion transportation bond bill, that would secure a 10-year funding stream for local road projects.

Meanwhile, discussion of the transportation portion of Patrick's proposal will be up for debate in Brockton on Wednesday where the House and Senate Ways and Means Committee will address that portion of the governor's budget.

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